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Yakutsk has the air of a frontier outpost. A six-hour flight from Moscow, the city of about 300,000 people on the banks of the Lena River was first conquered by Russians in the 1630s. It is the capital of a sprawling region, Yakutia, in which everything is extreme: the republic, one of Russia’s 85 federal subjects, is six times as large as France; it has a winter that lasts from October to May, when minus 50c is a normal temperature. And the region’s resources are equally outsized: it is home to rich deposits of diamonds, gold, coal and even the world’s largest trove of fossilised mammoth tusks.

If outsiders know anything of Yakutsk, it is likely that the city is very, very cold. In fact it is the world’s most-freezing major city. But the sort of temperatures that would lead many Europeans to lock themselves indoors for months on end do not get in the way of life here. Yakutsk buzzes along with the business of governing and cultural events even in the depths of winter, not to mention hosting several companies that make a small fortune from the region’s wealth of natural resources. Locals simply pile on the fur and several layers of socks for a night out at the theatre or a stroll through the main square, over which a statue of Lenin still keeps an eye. A journey that would be considered a rugged expedition elsewhere is thought of as an unremarkable commute.

Yet for all the nonchalance about the winter frosts, weather and geography define much about how Yakutsk was built and how it continues to function today. The city sits on a layer of permafrost so its buildings are constructed on stilts that lift them off the ground. According to Mikhail Grigoriev, deputy director for science of the city’s Melnikov Permafrost Institute, Yakutsk is like a laboratory for the whole of Russia; as much as 65 per cent of the country’s landmass is covered by this permafrost. Companies in the northern regions come here to understand how to operate on the frozen earth.

The institute has advised Gazprom and Transneft in laying pipelines over thousands of kilometres of permafrost and Chinese railway officials recently tapped its scientific expertise for Beijing’s plans to build the world’s highest-altitude railway in Tibet. “So is permafrost a friend or an enemy?” says Grigoriev’s colleague Viktor Shepelev. The answer is both. The frozen ground can actually be more stable and predictable than the swampland or arid, desert-like earth that would otherwise lie under Yakutsk. But if it isn’t understood or managed properly it can shift and buckle – leading to all manner of unpleasant geological surprises.

In recent years the permafrost found in Yakutsk and throughout the region has become a testing ground for global warming. Thirty years ago the average annual temperature was minus 11C; now it is minus 8C. As temperatures rise, the composition of the permafrost shifts and breaks apart. Shepelev points to a photograph of a muddy, flooded road outside of Yakutsk that gave way with no warning. “That’s what’s called a federal highway,” he says, enjoying a joke at the expense of the region’s notoriously poor infrastructure. But he stresses the seriousness of the problem: sinkholes can appear out of nowhere and swallow cars, he says.

For his part, Grigoriev is helping to lead a joint Russian-German scientific project based on a remote island in the Lena Delta to study the effects of global warming. Here in Yakutsk the centre for experiments is the underground permafrost laboratory buried beneath the institute, its low-hanging ceiling covered in shimmering icicles. On the summer afternoon when MONOCLE visits it is a muggy 25C outside but a frosty minus 8C a few metres below ground.

The same icy, rugged landscape powers Yakutia’s economy. Since the discovery of diamonds by Soviet geologists in the 1950s, the diamond industry has been the backbone of the region’s economic life. Gold deposits have also proved a valuable source of hard currency through international trade and the tax revenue from extraction. In recent years, Yakutia’s bountiful supply of coal has headed to China, Japan and South Korea. New oil fields are coming online, as are previously untapped gas deposits. A recently discovered cache of rare-earth metals in the far north could turn Russia into one of the world’s leading exporters.

“It sounds so simple and banal but without infrastructure we can’t do anything,” says Valery Maksimov, the republic’s 39-year-old economy minister. “If we don’t have roads to get our resources to the market or airports to bring in necessary supplies, nothing will work out.” Ensuring a robust and dependable transport network is an economic necessity. It is achievable but it’s far from simple given the distances and climate involved.

Nevertheless, the region’s bountiful resource wealth means the economic outlook is healthy compared with Russia’s overall economy, battered by falling oil prices, a weakening rouble and western sanctions. Yakutia’s GDP is expected to grow by 3 per cent this year, whereas Russia’s overall GDP will likely fall by 4 per cent. But Maksimov is cautious. “We have no illusions; risks remain,” he says.

Last spring the handful of companies that deliver fuel supplies around the republic were unable to raise financing. The regional government had to step in to provide cash so that local authorities would not have had to use planes and helicopters at exorbitant cost. “We can’t allow ourselves not to deliver fuel or food to the north,” says Maksimov. No matter how flush – or not – the region’s coffers may be in any given year, “those responsibilities remain”.

If Yakutsk is where ministers, company directors and investors meet to do business, the economy’s historic driver is Mirny, a city of 40,000 people that lies 800km west. It was here in 1955 that a young Soviet geologist named Yuri Khabardin found a kimberlite pipe and radioed back to Moscow: “I am smoking the pipe of peace.” The message was code that he had discovered a huge subterranean diamond deposit, later named Mir or “peace”; the city that cropped up around it was Mirny.

The open-cast mine reached a depth of 500 metres and was active until 2001, yielding diamonds worth more than €15.4bn. Today Yakutia has half a dozen open-cast and shaft mines. All the diamonds in the region are extracted, processed and sold on by Alrosa, a state-owned company that runs a mini-empire in Yakutia that includes its own airline to ferry miners across the vast territory.

On an August afternoon MONOCLE is shown around the Internationalny mine, a few kilometres outside Yakutsk, by its garrulous director Igor Duma. He is originally from Lugansk in eastern Ukraine, where his father was a coal miner. He, too, went to work in the pits and later mined coal in Barentsburg, a Russian settlement on Norway’s Svalbard archipelago in the Arctic Ocean. Ten years ago he came to Yakutia. “I like the freedom, the feeling that you have a place all to yourself,” he says.

We descend with Duma in the cage lift to nearly a kilometre below the surface. The air is damp and heavy and the fractal beams of our headlamps shoot lines of soft light against the mine’s walls. A maze of underground roads weave their way along the subterranean tunnels. The whole operation is clean and precise compared to say an underground coal mine. In one cavern, a drillbit the size of a small car bores into a kimberlite pipe. This mine is considered one of Alrosa’s richest deposits, producing around eight carats per tonne of ore; rich pickings compared with the average across all its operations of about one-and-a-half carats per tonne. “Right now you’re walking all over diamonds,” says Duma, as he approaches the greyish-blue slash of diamond-rich ore that his team is mining.

Diamonds from Yakutia mined by Alrosa account for 30 per cent of the global supply and the company has an estimated 608 million carats in diamond reserves, the world’s largest haul. Still, the permafrost presents an engineering challenge in several of the new open-cast mines it is digging throughout Yakutia. “You can’t truck it away, you simply have to blow it up,” says Pavel Danilyuk, deputy director of Alrosa’s mine in Nyurba. “The upper layer of soil is one giant piece of ice.”

Like many of Russia’s natural-resources exporters, Alrosa is protected from the ongoing slide of the rouble; its profits come in dollars from selling diamonds on international markets, while its costs – including salaries – are denominated in roubles. What’s more, the company has little long-term debt that it will need to refinance on international markets anytime soon, which is a problem for many other Russian firms.

Later we visit the company’s sorting and processing facility in Mirny, the last stop before the gems are sent to Moscow to be sold onward to dealers in Belgium, India and Israel. Unlike in the 1950s, about 70 per cent of Alrosa’s diamonds end up on the jewellery market rather than in factory machinery. As technician Anna Kirilovna says, holding a 17.5-carat stone in tweezers, “A diamond like this doesn’t leave anyone indifferent.”

The economic benefits of the industry, not to mention the region’s rich supply of other precious metals and in-demand natural resources, can be seen back in Yakutsk. The centre of the city is home to a smattering of new glass-fronted office buildings and apartment blocks that have given Yakutsk a facelift far removed from its stolid Soviet-era façade. Yet much of this new construction is made up of bland edifices that could be taken from an authorless guide to international shopping-mall architecture.

What ultimately gives Yakutsk its character is not its building stock, though, but its thriving cultural life, much of it based around the Turkic language Yakut, also known as Sakha. Despite a population of just 500,000 Yakut speakers in the republic, the Yakut-language theatre scene offers several new productions a year. Meanwhile, the film industry is the most developed standalone market in any of Russia’s regions, a mini-Hollywood making Yakut-language movies with Yakut stars for a Yakut audience.

On the surface, Yakut films have much in common with Asian cinema, says Irina Engelis, an adviser to the republic’s ministry of culture. “There are lots of visuals, lots of symbols and there is a primacy given to nature; it is alive, it’s also a character.” She organises an annual festival in Yakutsk to introduce local filmmakers to their Russian and international counterparts. It has a vibrancy and independence that might be hard to pull off in Moscow, where the Kremlin’s gaze is sharper. This autumn, acclaimed Russian documentarist Sergei Miroshnichenko and Polish feature director Krzysztof Zanussi will be on hand to teach a series of masterclasses.

Actor Marina Skrybikina explains the connection between viewers and Yakut cinema. “People take films personally,” she says. “They’ll think, ‘Oh, that’s the neighbourhood where I live, I know that guy from school.’” Her lastest will be released at the end of January, quite an auspicious date for Yakut film. “It’s the coldest time of year. What else can people do in the city? They go to the cinema.”

The most high-profile and successful film collective in Yakutsk is DetSat, the name of which comes from the Russian for “children of the Sakha Academic Theatre”, where the would-be film-makers became acquainted more than a decade ago. The Yakut language has plenty of comedic potential says co-founder Dmitry Shadrin. “It’s multiform, kind-hearted; people don’t speak directly, they don’t go head on. There’s a lot of nuances and games you can play with words.”

We have joined Shadrin on the set of an upcoming DetSat production, a comedy about two hunters who get lost in the woods. Shadrin says he wants the movie to have an air of Monty Python humour. At the peak of its popularity a few years ago, a quarter of the entire population of Yakutsk would pay to watch DetSat films in the cinema – a proportion that would be unheard of in Europe for even the most successful movies.

Another of the city’s more successful entrepreneurs is German Arbugaev, who owns Chochur-Muran. It’s a restaurant and “ethnographic complex” in a wooden hunting lodge, where guests can eat Yakut specialities such as horse-meat patties before taking a post-dinner dogsled ride. Arbugaev also runs a tour agency, arranging trips to the remote northern Arctic regions of  Yakutia. When we pay him a visit for a dinner of semi-frozen sliced fish – a kind of Yakut sushi – and stewed foal, he is awaiting the arrival of two men from Moscow, who have asked for a private fishing trip. Arbugaev has hired an AN-2 biplane to ferry the party to the banks of the Olyokma River, from where they will take a catamaran 250km north. His clients usually ask for somewhere quiet and unpopulated, Arbugaev says, “and in fact you won’t see anyone for hundreds of miles”.

His efforts highlight the difficulty of travel between Yakutsk and other towns in the region that makes administering even the most basic services difficult. A co-operative project between the regional government and Yakutsk-based carrier Polar Airlines oversees a medical aviation service, with a fleet of seven Russian-made Mi-8 helicopters and a Czech-made L-410 turboprop.

Catching a ride with Dr Iosif Olesov, deputy head of Yakutia’s medical aviation service, we speed to Yakutsk’s Magan airport. His team is flying to the village of Khonnu, where a two-year-old boy has swallowed a coin that has become dangerously lodged in his throat. It makes as many as eight trips a day like this, treating about 2,500 people a year. “Thanks to us, every resident of the region can get the same quality of medical care, even if they are deep in the taiga,” says Olesov. Of course, this doesn’t come cheap: Yakutia spends RUB1.3bn (€18m) a year on the flights and related medical care.

For Igor Tsoi, the commercial director of Polar Airlines, the company’s business is as much social as it is commercial. It flies only within Yakutia and of the 130,000 passengers the airline carries every year, Tsoi estimates that 80,000 of them live in towns with no other transport connection – and thus no other means of travelling beyond their local area.

The carrier’s fleet of Soviet-made aircraft uses mostly gravel landing strips to help residents reach the outside world, testing even its workhorse AN-24, developed in the 1950s for Arctic conditions. “How we used to fly, that’s how we fly today,” says Tsoi. The same could be said for Yakutsk itself: stoic, unfazed by a location and climate that would leave other cities paralysed, and forging on with the regular business of life.

Cool, calm and collected

If Yakutsk can offer other Russian cities any lessons, it is how to make do in a frozen, unforgiving environment. Every house in town is built on stilts to avoid its foundations from slipping and cracking in the permafrost. Interiors are kept so toasty that it’s not uncommon for locals to crack open a window to get some air when it’s minus 50C outside.

Given that the majority of Russia’s vast territory is within a permafrost zone, the city is a kind of testing ground for various questions of municipal life. This includes everything from public transport to the logistics of moving food and fuel across spaces that are as huge as they are raw and underdeveloped. The Soviets invented the An-24 plane, for example, to fly in the Arctic; over time it became the unbreakable workhouse for aviation as far away as Sub-Saharan Africa.

The region of Yakutia, larger than any European country, is like Russia in microcosm: huge, cold, rugged and rich in natural resources. Learning to operate in this environment has obvious lessons for any number of Russian municipalities and companies that must contend with similar factors.

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